News Column

Experts Lament Dearth of Infrastructure

April 29, 2014

Obinna Chima

Some financial market experts have decried the poor state of infrastructure in the country. The experts spoke at a finance conference titled: "Resilience of the Nigerian Financial Industry in the Face of Changing Global Circumstances," organised by the Lagos Business School.

According to them, with the recently rebased Gross Domestic Product (GDP) which put the size of the economy at $510 billion, there is need to improve the state of the country's infrastructure.

One of the keynote speakers, Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane noted that the lesson from the GDP rebasing is like "we have just come back from an x-ray."

Rewane insisted that the state of Nigeria's infrastructural base as at 1990 is probably the same infrastructure base that the country has today.

He added: "So, lets go back and ask ourselves, the same kilometre of roads we had as at 1990, is still the same amount of roads tarred today. Between 1990 and today, only one bridge has been built in Nigeria and that is the Lekki-Ikoyi bridge.

"Between 1990 and today, no new refinery has been built. Between 1990 and today, no new port or port rehabilitation has taken place. Between 1990 and today, not one rail line or rail infrastructure has been built. "Between 1990 and today, we have few scattered Independent Power Projects. We are still at 3,800 megawatts," he added.

He pointed out that what the GDP rebasing did was to show more accurately, the structure and size of the economy.

He explained that the exercise was delayed till this year "because if we had rebased when we had that debt, we would have qualified as a medium income country and we would not have been able to access the debt rescheduling and forgiveness then.

"So it was in our interest not to have rebased so that our economy remained small." The FDC boss who noted that power, roads, bridges, ports, refineries are critical for the growth of any nation, urged government at all levels to focus on infrastructural development.

"The infrastructure gaps are so glaring that you cannot use the infrastructure of a $100 billion GDP economy, to run an economy of $510 billion GDP. If you are 20 years old, you can't wear trousers of a nine-year old.

"So the winners are those that invest in infrastructure, institutional, physical and otherwise," he maintained.

On his part, the Deputy Managing Director, Diamond Bank Plc, Mr. Uzoma noted that with the aggressive drive towards reducing the dominance of cash in the system, the cashless, the alternative banking channels would drive the growth of the banking system.

Uzoma, however stressed the need for government to create enabling environment for the financial system to be able to effectively play its intermediary role.

"There is huge opportunity for banks considering the huge number of the unbanked population," he added.

He also advised regulators to work in harmony in order to support the growth of mobile banking.

Also, the Managing Director/Chief Executive Officer, FBN Capital Limited, Mr. Kayode Akinkugbe pointed out that with adequate education, it would be difficult to develop human capital.

According to the FBN Capital boss, some of the challenges confronting the nation are home grown.

"I think you will find out that as the private sector takes ownership of more of the assets, banks would fund them. Banks were not created to take money and put into government bills. I think that time is gone.

"Now, banks would work with people to make sure their projects get to fruition because the banks are also at risk if the person does not pay," he added.

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Source: AllAfrica